Delhi High Court
Geetu Lakhpat & Another vs Jaipal on 5 April, 2011
Author: Valmiki J. Mehta
Bench: Valmiki J.Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ RFA No.63/2011
% 5th April, 2011
GEETU LAKHPAT & ANOTHER ...... Appellants
Through: Mr. Y.S. Chauhan, Advocate.
VERSUS
JAIPAL ...... Respondent
Through: Mr. Mukesh M. Goel, Advocate.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
1. Whether the Reporters of local papers may be
allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest?
VALMIKI J. MEHTA, J (ORAL)
1. The challenge by means of this Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned judgment and decree dated 6.10.2010 whereby the suit of the respondent/plaintiff was decreed for Rs.2,00,000/- alongwith interest @ 2% per month from 18.2.2002 till realization.
2. Learned counsel for the appellants has in the appeal only prayed for reduction of the unduly high rate of interest of 2% per month which has been granted by the trial Court. Reliance has firstly been placed upon Section 3 of the Usurious Loans Act, 1918 (as applicable to Delhi) as per RFA 63/2011. Page 1 of 4 which in case of an unsecured loan the maximum rate of interest which is allowed is 12-1/2% per annum simple. Learned counsel for the appellants also relies upon various judgments of the Supreme Court as per which the Supreme Court has directed the Courts to take note of the consistent fall in the rates of interest on account of the changed economic scenario, more so when there is time spent in litigation. These judgments of the Supreme Court are Rajendra Construction Co. v. Maharashtra Housing & Area Development Authority and others, 2005 (6) SCC 678, McDermott International Inc. v. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181, Rajasthan State Road Transport Corporation v. Indag Rubber Ltd., (2006) 7 SCC 700 & Krishna Bhagya Jala Nigam Ltd. v. G.Harischandra, 2007 (2) SCC 720 and State of Rajasthan Vs. Ferro Concrete Construction Pvt. Ltd (2009) 3 Arb. LR 140 (SC).
3. Learned counsel for the respondent, in reply, states that the respondent is entitled to interest @ 2% per month because the said rate was a contractual rate of interest.
4. In my opinion, the arguments as urged by the counsel for the appellants are well founded. In the present date, granting of interest @ 2% per month is both exorbitant and usurious. The Supreme Court in the aforesaid judgments, relied upon by the counsel for the appellants, has granted interest varying between 6% to 9% per annum. A Division Bench of RFA 63/2011. Page 2 of 4 this Court in the case of Pt. Munshi Ram & Associates (P) Ltd. Vs. Delhi Development Authority 2010 (3) Arb. L.R. 284 (Delhi) has held that Court has power to reduce even the pre-suit rate of interest in case the said rate of interest is found to be against the public policy. In my opinion, rate of interest of 24% per annum i.e. 2% per month as granted by the trial Court is clearly against the public policy in the present economic scenario considering the aforesaid judgments of the Supreme Court. Considering the facts and circumstances of the present case, I am of the opinion that interest of justice would be more than served if the respondent is granted interest @ 7-1/2% per annum instead of 2% per month i.e. 24% per annum.
5. Learned counsel for the appellants also states that the appellants had deposited a sum of Rs.1,50,000/- in the trial Court pursuant to the order of the trial Court dated 4.10.2006, and which amount of Rs.1,50,000/- has already been withdrawn by the respondent, and so confirmed by the counsel for the respondent. It is urged that the trial Court has not given adjustment to the appellants with respect to this amount of Rs.1,50,000/-.
6. In view of the above, the appeal is partially accepted. The impugned judgment and decree is modified by passing a decree of Rs.2,00,000/- with interest thereupon @ 7-1/2% per annum simple from 18.2.2002 till 4.10.2006. From 4.10.2006 respondent will be entitled to interest only on the amount of Rs.50,000/- @ 7-1/2% simple till realization of RFA 63/2011. Page 3 of 4 this amount. The respondent will give credit of Rs.1,50,000/- received by him while calculating the net amount due under this judgment. The amount deposited in this Court by the appellants of Rs.65,000/- will be available to the respondent in pursuance to the present judgment if so required. Decree sheet be prepared. Parties are left to bear their own costs. Trial Court record be sent back.
C.M. No.1964/2011 (stay) in RFA No.63/2011 No orders are required to be passed in this application which is disposed of in terms of the main judgment.
APRIL 05, 2011 VALMIKI J. MEHTA, J.
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RFA 63/2011. Page 4 of 4